BigBear.ai's Stock Declines Post-SPAC Merger, Revenue Falls Short of Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Weak Revenue Growth: BigBear.ai's revenue increased from $146 million in 2021 to only $158 million in 2024, significantly below its forecast of $550 million, highlighting the company's vulnerability amid intense competition and macroeconomic pressures.
- Dependence on Government Contracts: The company relies heavily on rigid government contracts rather than scalable commercial deals, placing it at a competitive disadvantage, and recent acquisitions of Pangiam and Ask Sage have not significantly boosted short-term revenues.
- Leadership Change Hopes: The appointment of new CEO Kevin McAleenan sparked hopes for fresh government contracts; however, analysts expect that recent deals will not significantly impact revenues, and the company is likely to remain unprofitable in the near term.
- High Market Valuation: With a market cap of $2.5 billion, BigBear.ai's current stock price of $5.95 reflects a high P/E ratio of 15, leading investors to consider more promising blue-chip stocks like IBM instead.
Analyst Views on BBAI
Wall Street analysts forecast BBAI stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BBAI is 6.33 USD with a low forecast of 5.00 USD and a high forecast of 8.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Analyst Rating
1 Buy
2 Hold
0 Sell
Moderate Buy
Current: 5.710
Low
5.00
Averages
6.33
High
8.00
Current: 5.710
Low
5.00
Averages
6.33
High
8.00
About BBAI
BigBear.ai Holdings, Inc. is a provider of artificial intelligence (AI)-powered decision intelligence solutions for national security, supply chain management and digital identity. The Company is a technology-led solutions organization, providing both software and services to its customers. It combines subject-matter expertise with technology to connect the enterprise, provide insights on process performance and recommendations for managing risk. It offers computer vision, anomaly/event detection, and descriptive and predictive analytics to support operations and break down silos between vendors and systems. The Company’s customers span the public and private sector, including the United States defense and intelligence agencies, border protection, transportation security, manufacturing, distribution and logistics, as well as travel, entertainment and tourism. It also offers software assets that are tailored for digital identity and biometrics, leveraging advanced vision AI technology.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
